7 basic roles of a Government – do they have to change in future?
What do we need from a government and what will we need in future?
What are the current and potentially future roles of our Governments? What can they to, what should they do and how are these roles defined?
For most people, government is just a vehicle through which they pay taxes and choose who represents them in the political sphere. But in fact a government can have many different functions and it is important to understand them and why we need to do better. Particularly in a world where we face economic crisis, global warming, social inequality and the rise of the tech giants, we need to better understand who our government is, what it can do and what it lacks, especially at this time.
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The changing role of government throughout history
Throughout history, governments have had different functions. Sometimes they were in charge of looking after the people, and sometimes they were in charge of making laws. There have been times when governments did both, and times when they did only one or the other.
The role of government has changed a lot over the years. Governments used to do everything. They made the laws, enforced them and looked after the people. That was the way it was for many years.
But over time, the role of government began to change. Governments began to give up some of their power to other organisations. For example, in many countries the government is no longer responsible for law enforcement. This is now done by the police.
The role of government in caring for people has also changed. In the past, governments were responsible for providing things like health care and education. But in recent years, many governments have started to privatise these services. This means that instead of the government providing these services, private companies are now doing so.
Despite these changes, the role of government is still very important. Governments are still responsible for making laws and ensuring that they are enforced. They are also responsible for providing services that people need, such as health care and education. Although the role of government has changed over the years, it remains an essential part of society.
7 basic roles of the Government
1. Provision of public goods
Goods and services that are “non-excludable” and “non-rival”, i.e. services where you can’t exclude anyone from using them, or where there are no trade-offs if more people use them.
Examples: Public defence is perhaps the best example to illustrate the two concepts of non-excludable and non-rival goods. If a country protects its territory, then you cannot exclude a citizen living in that country from the service of that defence. It’s no different if another person joins the country, because the whole region is protected, this extra citizen consumes the service, but he doesn’t compete with other citizens, so they all get the same protection as before.
2. Managing externalities
One of the most critical, but also most debated, issues is the management and intervention of externalities. These externalities can be positive or negative. Usually the positive externalities are managed by state-owned companies or highly regulated public/private companies. Most negative externalities are usually mitigated by laws, restrictions and the introduction of standards.
Problems with externalities can also involve a systematic “market failure”. This occurs when individual incentives do not lead to rational outcomes for the group as a whole. These market failures often persist to a certain point until government intervenes to regulate.
Examples: The most common areas where positive externalities are managed by governments are health care, education, but also things like environmental protection. On the other hand, there may also be negative externalities that need to be managed. For example, overfishing, global warming and other areas where regulation is needed for the good of all people.
3. Government spending
Governments can act as leading drivers for specific investments and even industries. This only began to happen in the middle of the twentieth century, when government spending really started to take off as a driver of the economy.
Examples: In recent years we have seen massive investment in new technologies. Germany, for example, is funding €10 billion of seed investment to help late-stage start-ups expand their business. They hope that this government incentive will lead to a growing business, more jobs, but also €20bn of co-investment from private investors attracted by the government support.
4. Distribution of income
This is one of the most pressing and enduring political issues. It involves regulating the market, ensuring minimum incomes, creating more ‘equality’, but also ensuring that incomes are distributed as evenly as possible. This also means taking from the rich and giving to the poor.
Example: Income tax is perhaps the best-known measure to ensure greater equality. While in most countries the government taxes little or almost nothing on lower incomes, the rich usually pay a higher proportion of their income in taxes.
5. Federal budget
Managing the deficit and controlling government spending and revenue is an important role for governments. Revenue is usually raised through taxes and fees, while expenditure is usually on things like education, social security, public defence and administrative costs.
Example: Most countries have a budget that they negotiate each legislative period. In this budget they outline their target for the deficit, the investments they intend to make and the savings they intend to make.
6. Taxation
All government functions require funding and redistribution. Whether providing public goods such as education, spending on infrastructure or distributing income. All expenditure has to be ‘earned’ at some point. For a government, it is a key role to determine the tax system and its impact on the economy, social equality, but also other factors such as competitiveness and more. It is this role that is one of the most controversial and leads to a lot of tension internationally when so-called “tax havens” appear.
Example: Income tax, property tax, corporation tax and many other taxes are used to give the state a share of the generated value, which can be used to provide basic services, but also to distribute if there are inequalities.
7. Social security
With growing concerns about modern colonialism and increasing social inequality, the call for social security has never been louder. Most of us only know social security from our parents or grandparents, who receive a pension from the state so that they don’t have to worry about working in their old age. In many countries, social security also covers unemployment, sickness and other forms of support in various situations. When we look at a digital world, the basic income is also gaining momentum, as many people fear that the huge tech world will leave many people unemployed, so they fear for their basic income.
Example: Pension and disability insurance are the two basic pillars of social security that you find in almost every country in the world.
Future role of government may change
As we can see, governments have a wide range of interests to look after. Moreover, most problems can only be addressed after they have arisen, especially when it comes to dealing with externalities, social inequalities or market failures. Government intervenes only when structural problems arise. This reactive attitude of most governments also causes a lot of problems, because the results can be observed over a long period of time and governments usually react when it is too late.
It might be time that governments get new roles.
- A role of helping citizens making better choices
- A role of social engineering
- A role to collaborate instead of politicizing
- A role of trying out new solutions (and also failing)
- A role to proactively preventing future known externalities
- A role as a digital government platform provider
One of the examples of this kind of proactive style of government can be found in Sweden, where insights from behavioural economics have been used to redesign Sweden’s social security system, organ donation rules and much more. This could play a key role in the future, where we as a society need to be proactive in shaping the future.
Perhaps the fast pace of our time also requires a new kind of government – techno-progressive governance could be one way. Leaders who actively lead into a better future for the whole, rather than managers who just try to react and optimise based on the past.
Techno-Progressive Governance: Shaping the Future of Government
Techno-progressive governance represents a fundamental shift in the role of governments in response to rapid advances in technology and the emergence of digital and virtual domains such as the metaverse. At its core, techno-progressivism is an ideology that advocates harnessing technological innovation to promote social progress while ensuring ethical standards and equitable access.
This paradigm shift implies that governments change their traditional regulatory and administrative roles to become facilitators and enablers of technological progress in a positive way. In this new role, governments are responsible for creating an ecosystem that fosters innovation. This includes investing in digital infrastructure, reforming education systems to emphasise digital literacy and skills for the future, and providing support and incentives for research and development in cutting-edge technologies (e.g. regulatory sandboxes). But let’s not forget that collaboration is a cornerstone of techno-progressive governance. It requires partnerships between governments, technology companies, civil society and international organisations to effectively address the complexities of a globally interconnected digital world.
Over the next 50 years, we will also see the emergence of digital spaces such as the metaverse, which will further challenge governments to adapt their approaches to governance. This includes not only digitising current services (e.g. Digital Government Technology Platforms (DGTPs)), but also considering the impact on society and our planet as a whole. There are many forces driving change, and it may be time to proactively build the future we want, rather than lag behind.
Conclusion on Government Roles
The basic role of governments will always be there. They are needed to enable a society that can work to common standards and limit externalities for many. Over time, the roles change, and modern challenges such as economic crises, social inequalities and the influence of technological giants make it increasingly important to understand and adapt their roles. Historically, governments have evolved from mere enforcers of the law and guardians of the people to entities that manage externalities, drive economic growth, distribute revenues, oversee public budgets, regulate taxes and provide social security. These functions have always adapted to the changing needs of society and the economy.
Looking ahead, one potential scenario that will differentiate governments in the future is the adoption of techno-progressive governance. This approach reimagines government functions in the context of rapid technological advances and the rise of digital domains such as the metaverse. Techno-Progressive Governance positions governments as enablers and facilitators of innovation, emphasising investment in digital infrastructure, education reform and support for emerging technologies. It also involves the use of new methods to enable responsible innovation and the adaptation of governance strategies to the physical and virtual realms of the future.
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